But, But, But... The Blockchain!

While former executives of FTX and Alameda Research testify in the trial of Sam Bankman-Fried in a US court room, the actor or actors who stole $470 milion dollars worth of deposits from FTX on its last day of operation are now trying to complete the task of cashing in the stolen loot for real dollars. A report in the BBC on that effort should give pause for anyone still under the illusion that crypto-currencies are “safe” and that “blockchain ledgers” provide assurance that rightful ownership can be proven at any time.

Security is such a concern within the cryptocurrency realm that companies specializing in conducting forensic research in miners and exchanges have been formed. One such firm Elliptic traced about $54 million dollars worth of stolen FTX assets through a criminal firm known as Sinbad that operates a “mixer” which essentially launders crypto assets of information about their origins, then blends them into accounts on exchanges, allowing those stolen assets to be converted to cash.

It’s probably no suprise that the path taken by that $54 million traced so far points in part to Russian cyber-crime organizations. This round of laundering began in earnest as the SBF trial began, which suprised experts in the crypto-fraud realm. Normally, crypto-thieves tend to be VERY patient, waiting YEARS to try to unload stolen assets. Given where some of these assets appear to be going, it probably shouldn’t be a suprise why the thieves are not waiting to cash in their chips. If Russians are involved, they likely need the cash desperately – either a government entity needs it for the war in Ukraine or private entities are squirreling away money abroad in anticipation of an attempt to escape from Putin’s realm.



The other half of this in the US where some of the FTX money was coming from the starting point a wallet on a US computer is reported to the IRS. There has to be an outcome or the IRS is going to come after you.